In recent years, green synthesis of nanoparticles, i.e., synthesizing nanoparticles using biological sources like bacteria, algae, fungus, or plant extracts have attracted much attention due to its environment-friendly and economic aspects. The present study demonstrates an eco-friendly and low-cost method of biosynthesis of silver nanoparticles using cell-free filtrate of phytopathogenic fungus Macrophomina phaseolina. UV-visible spectrum showed a peak at 450 nm corresponding to the plasmon absorbance of silver nanoparticles. Scanning electron microscopy (SEM), atomic force microscopy (AFM), and transmission electron microscopy (TEM) revealed the presence of spherical silver nanoparticles of the size range 5 to 40 nm, most of these being 16 to 20 nm in diameter. X-ray diffraction (XRD) spectrum of the nanoparticles exhibited 2θ values corresponding to silver nanoparticles. These nanoparticles were found to be naturally protein coated. SDS-PAGE analysis showed the presence of an 85-kDa protein band responsible for capping and stabilization of the silver nanoparticles. Antimicrobial activities of the silver nanoparticles against human as well as plant pathogenic multidrug-resistant bacteria were assayed. The particles showed inhibitory effect on the growth kinetics of human and plant bacteria. Furthermore, the genotoxic potential of the silver nanoparticles with increasing concentrations was evaluated by DNA fragmentation studies using plasmid DNA.